German consumer spending stagnates

German exports drove growth in Europe’s biggest economy in the second quarter as consumer spending stagnated and corporate investment declined, underpinning concern that the pace of expansion may slow.

Exports rose 3.2% from the first quarter, the Federal Statistics Office said, in a first breakdown of gross domestic product. Domestic demand unexpectedly fell 0.1% in the same period.

The statistics office said the economy grew 0.5% in the second quarter, confirming its August 12 estimate.

The report provides few signs that demand within Germany will replace exports as the main driver of expansion. Exports, which account for about one-third of the economy, may also slow as record oil prices stifle demand from the US and Asia.

“The fact that German domestic demand is weak despite strong global growth does not bode well for the second half,” said Invesco Asset Management chief economist Joerg Kraemer in Frankfurt.